The Federal Circuit has jurisdiction to review whether a patent claims a covered business method and lacks jurisdiction to review initiation of CBM review

Sightsound Technologies, LLC v. Apple, Inc., Case Nos. 2015-1159 and 2015-1160 (Fed. Cir. Dec. 15, 2015)

The patentee owned two patents that disclosed methods for the electronic sale and distribution of digital audio and video signals. The petitioner petitioned the PTO for a covered business method (CBM) review of several claims on anticipation grounds only. The PTO granted the petition, and the PTAB found all the challenged claims invalid for obviousness. The patentee appealed, arguing that the PTAB’s decision should be set aside because the petition did not assert obviousness, and only asserted anticipation, and because the prior art did not provide a motivation to combine the elements of the claims. The petitioner countered that the Federal Circuit lacked jurisdiction to review the PTAB decision to institute the CBM. The Federal Circuit affirmed.

The Federal Circuit held it lacked jurisdiction to review the PTO’s decision to institute CBM review even though the petition raised only anticipation challenges. The court held, however, that it could review whether the challenged patents were in fact CBM patents. The PTAB had found that the challenged patents were CBM patents because they constituted a “financial product or service” and were not “technological inventions.” The court affirmed the PTAB’s decision that an activity not directed to money management or banking, such as content distribution described in the patents, can constitute a “financial product or service” within the meaning of the statute. The court also affirmed the PTAB’s decision that the challenged patents did not claim “technological inventions” because the claims were determined to be directed to nothing more than a combination of known technologies.

The court also upheld the PTAB’s obviousness determination. The court found that the prior art publications themselves expressly provided a reason for their combination. Because the patentee conceded that the prior art publications described elements working according to their established functions in a predictable manner, the court found an express reason to combine the references, rendering claimed inventions obvious to one of ordinary skill in the art. The court also affirmed a finding of no commercial success because there was no proof of a nexus between the claimed invention and the success of the alleged commercial embodiment; the success of the petitioner’s products were instead found to be due to other unclaimed and unrelated features.

A copy of the opinion can be found here ►